Here we explain you briefly about the legal requirements and processes regarding to buy or sell properties in Thailand.
Ownership of a Condominium in Thailand.
Under Thai Law, 49% of the internal area of a condo building, excluding the common areas, can be assigned to be owned by foreigners. It is also possible to open or take over a Limited Holding Company and buy properties in Thailand, At ATS we can realize this !!
Buying an condominium, is the simplest option available to foreigners. The only restrictions on purchasing an condominium, are that the funds used for purchase were remitted from abroad and correctly recorded as such by the receiving Thai Bank on a Tor Tor Sam. Purchases of condominiums by foreign individuals come under the jurisdiction of the Condominium Act B.E. 2535 (1992).
The owner of each condominium is issued with a certificate of unit ownership. The certificate also has a statement saying exactly what percentage of rights over the common areas of the building each owner has.
Ownership of a House and/or Land in Thailand.
To realize ownership of a house is to set up a private limited company with mixed Thai and foreign ownership, the foreign ownership being 49% or less. Companies are allowed to own a house. The foreign national can control the company by using a legal power of attorney from the Thai shareholders, handing control to the foreign directors, or through assigning greater voting rights to the foreigner partner/s. This is an effective and time-tested route, most commonly taken by foreigners.
Ownership of land is governed by the Land Code BE 2497 (1954), the Civil and Commercial Code, Land Reform for Agriculture Act BE 2518 (1975) and the regulations set forth by the Ministry of the Interior.
Although Thai law prohibits foreigners from owning land in Thailand, there are various ways in which you can structure establish a controlling interest in a Thai company that owns the land, or own a lease for the land in your own name, all complying with existing thai laws.
Foreigners can also invest at least THB40M (US$1,038,314) in a Board of Investment approved project. They will then be allowed to purchase up to 1 Rai (1,600 square meters) of land.
There are, essentially, two important documents that are needed: passport and an Exchange Control Form. But if the option of buying through a company is preferred, the following are required documents:
- Certified copy of the certificate of incorporation
- Certified copy of the memorandum of association
- Notaries certificate
- List of shareholders (in English with Thai translation)
- Minutes of directors’ meetings with resolution to purchase the property
- Letter of advice regarding specific signature
- Power of attorney – if you, as a director, will not be present in the transactions
- Free debt letter
- Foreign co-owner letter
- Certified copy of IDs of authorized director(s)
- Certified copy of the house registration of the authorized director(s)
- Title deed of the condominium unit
If you are planning on purchasing a house, condo or land in or any property in Thailand as an investment or place to live in, feel free to ask us for advice and for our services and we be happy to guide and assist you in every step of the process.
Taxes and Costs Payable When Purchasing a Property.
On all purchase/sale of property in Thailand there is a stamp Duty of 0.5%, a transfer fee of 2%, a business tax of 3.3% levied against an owner who has been in registered possession of the property less than 5 years, and withholding tax of 1% of the Government price or the declared value whichever is the higher. There is no Capital Gains Tax in Thailand, There are no set rules on who pays these fees and taxes, and it is just another part of the bargaining process, as with all the other costs of the transfer of ownership.
Tor Tor Sam (3).
A Tor Tor Sam (3) is an official bank document issued by the receiving bank upon the receipt of foreign currency into your bank account in Thailand. You must request a Tor Tor Sam from your bank when you are remitting funds to Thailand for the purpose of purchasing a condominium, and the Tor Tor Sam must specify that the remittance is solely for the purpose of purchasing a property – Code 5.22.
Land Title Deeds in Thailand.
The Title Deed (Chanote) is the purest form of land ownership. It ensures easy transfer, one original set is kept in the District Land Office where the registration of land transfer takes place, and the other original set is given to the owner of the land. Look for the red coloured crest at the head of the certificate.
Nor Sor Si Jor (Chanote Title or Title Deed Certificate)
A true title deed accurately surveyed and marked by Land Office posts. The land can be sold or transferred unless the previous owner stipulates restrictions in selling or transferring that the new owner is not able to sell or transfer the land for 5 or 10 years after the acceptance of ownership of the estate.
Nor Sor Sam
These are land title deeds issued by the District Land Office with clear records of ownership which can be sold or leased by posting 30 days notice to the public. They are less accurately surveyed that a Chanote.
Nor Sor Sam Kor
The N.S.3.K is similar to the N.S.3 Gor but is surveyed and issued in an area which has no parcel points set by using an aerial survey. This document is issued by corresponding land office. There are no restrictions for the use of the land and there is no need to advertise any legal acts, you may subdivide the land into smaller plots.
Nor Sor Song
The N.S.2 is a consent letter issued by the land department to the holder. This document entitles the holder to occupy and use the land for a temporary period of time. The holder has to commence occupation and using the N.S. 2 land within 6 months and has to complete the utilization of the land within 3 years from the receipt of N.S.2. This land may not be sold or transferred except by inheritance. Depending on the land’s location, this document may be upgraded to Nor.Sor. 3, Nor.Sor. 3 Gor or Nor. Sor. 4 Jor (Chanote), however, after the upgrade the prohibition for sale or transfer is still effective and in full force.
Sor Kor Nung:
The S.K.1 land document is a notification form of possession of land and has few rights associated with it. It entitles the holder to occupy and use the land (generally for farming). The person who actually occupies the land may have a better right than the person who has only a notification form. This land may be sold and transferred by inheritance. The transfer process is no more than handing over the notification form and use of the land from one person to another. It is not possible to register rights (sale, lease, usufruct, mortgage, etc.) over this type of land. Depending on the land’s location, this document may be upgraded to a title deed Nor. Sor. 3, Nor. Sor. 3 Gor or Nor. Sor. 4 Jor (Chanote).
Measurements in Thailand.
Thai land measurements are a combination of imperial and metric measurement systems. Title deeds in Thailand include all land measurements using the Thai system and are also written in Thai, therefore it is beneficial for you to have a translation if you are thinking of buying a property. Below you’ll find a comparison between the Thai and Western sytems which hopefully will help you gain a better understanding.
1 Wah = 2 Metres
1 Sq Wah is called a Talangwah = 4 Sqm
100 Talangwah = 1 Ngan = 400 Sqm
4 Ngan = 1 Rai = 1600 Sqm = 400 Talangwah
1 Acre = 4047 Sqm = approx 2.53 Rai
1 Hectare = 10000 Sqm = 6.25 Rai